How to Franchise: Starbucks Coffee
Starbucks is, for most people, more than just a mere provider of coffee. It’s a venue to chat with friends and to meet up with colleagues, and also a go-to location for those who want a cozy place to be alone. All around the world, the Starbucks experience has undeniably become a valuable part of its customers’ daily lives.
Are you interested to run your own Starbucks outlet? How much is the Starbucks franchise fee? Find out below if you can own your Starbucks coffee shop soon.
About Starbucks Coffee
The first Starbucks store opened in 1971 in Seattle, Washington. Although its current chairman and CEO, Howard Schultz, is more associated with Starbucks, he actually did not start the company. Starbucks was started by founders Jerry Baldwin, Zev Siegl, and Gordon Bowker and got its name from Starbuck, a character in the famous Moby Dick novel by Herman Melville.
In 1987, Howard Schultz, a former manager and employee of Starbucks, purchased the company from the original owners with the help of local investors. Having been fascinated with the sense of community in the coffeehouses he saw and visited in Italy, Schultz sought to bring the same experience back to the United States. After the acquisition, he rebranded his own Il Giornale coffee outlets as Starbucks and quickly set on a worldwide expansion plan.
As of 2018, there are more than 29,000 Starbucks shops worldwide, according to market research company Statista. Interestingly, the Philippines is one of the first foreign countries that Starbucks ventured to expand into in the late 1990s.
Starbucks in the Philippines
The first Starbucks coffee shop in the Philippines opened on December 1997. The Philippines became the third international market for Starbucks, following Japan and Singapore which both opened Starbucks outlets in 1996.
The first Starbucks shop in the country can be found at 6750 Ayala Building in Makati City which, until today, still exists. At present, there are more than 300 Starbucks Coffee shops in Luzon, Visayas, and Mindanao.
Starbucks Coffee Products and Items
Whether it’s hot or iced, mild or strong, you can count on Starbucks to have all kinds of coffee for every taste and preference. These are some of the drinks Starbucks offers in the Philippines:
- Caramel Macchiato
- White Chocolate Mocha
- Starbucks Doubleshot
- Cafe Latte
- Cafe Mocha
- Chai Tea Latte
- Matcha Green Tea Latte
- Caramel Frappuccino
- Coffee Jelly Frappuccino
- Java Chip Frappuccino
- Teavana Iced Tea
Aside from coffee and tea, Starbucks also offers fresh food such as pastries and salads. Not only that, there are also various merchandise available, such as mugs and tumblers sporting Philippine-focused designs for those who can’t get enough of the Starbucks lifestyle.
Starbucks Franchising / Licensing Fee
This may come as a surprise but Starbucks actually does not franchise its stores. Instead it operates using a licensing model wherein those interested to own a Starbucks store enter into a licensing agreement, wherein the company merely provides to the licensee many of the important business aspects such as store layout, equipment, training and support, inventory and advertising.
Why is Starbucks using licensing and not franchising?
According to the company, the licensing model, versus franchising, allows both Starbucks and the licensee operator to be flexible in localizing the store. The licensee operator can choose which product offerings they think would sell best but, of course, this has to have prior approval from Starbucks.
Also unlike the stores of McDonalds or Jollibee or Burger King which follows a franchising model, Starbucks licensed stores can be heavily customized and localized, although the store layout and design will have to come from one of Starbucks’ 18 design studios.
Starbucks Licensing Benefits and Inclusions
You’re probably wondering: How much is the Starbucks licensing fee?
Unfortunately, the official company website is silent with regarding to the Starbucks licensing fee amount. Several sources, however, state that to operate one licensed store in the United States, the Starbucks licensing fee could cost around $300,000 to $400,000.
The licensing agreement includes the following benefits, as mentioned in Starbucks’ official website:
- Starbucks menu, equipment, training and support
- Whole bean packaged coffee and comprehensive merchandise assortment
- Exclusive Starbucks food and bakery program
- Seasonal promotions
- Proprietary equipment and fixture package
- Customizable store design
- Ongoing expertise, consulting and support including onsite visits
The required franchise fee is a huge amount of money, no doubt, but even if you can afford it, Starbucks International does not currently accept new license applications for the Philippines.
Franchising Starbucks in the Philippines
The only authorized licensee of Starbucks Coffee International in the Philippines is Rustan Coffee Corporation. The company belongs to the Rustan Group of Companies, owned by the Tantoco family, which also operates Rustan’s Department Store and Rustan’s Supermarket.
Is it possible to franchise your own Starbucks store in the Philippines?
Starbucks Philippines’ website currently does not offer any information about licensing. It appears the company is not looking to franchise Starbucks stores in the country. Once we get official information from Rustan Coffee Corporation, we will update this post.
Looking for other franchising opportunities? Check out PinoyMoneyTalk’s List of Philippine companies available for Franchising
Information and Image Sources: Starbucks official website (www.starbucks.com), Starbucks Philippines website (www.starbucks.ph), Starbucks Philippines Facebook page, Statista